Q&A: Medicaid and the Return of Donor Dollars

What are the financial implications for churches with Medicaid’s five year look-back period?

Frank Sommerville, Attorney, CPA
Bio
Can Medicaid sue a church for gifts a church member made before they required Medicaid assistance?

With an aging population, instances of church members moving to nursing homes and using their personal financial resources to pay for their care are increasingly common. Currently, there is a five year look-back on expenditures for a person who will likely use up their personal funds (this is referred to as spending down), and then need Medicaid assistance. In these instances, the county social service agency can request that a church give back any large sums of money that a member has donated to the church within the five year look-back period.

I was advised of this by the social service agency in my county when my mother had to go live in a nursing home after an accidental fall that caused her to need supervision and 24 hour care. Seemingly, the government agency claims that it has the right to request the money. Do they?
Yes, Medicaid can sue the church for the return of donations made in the last five years before the donor sought assistance from Medicaid. You can learn more about returning donor gifts with Richard Hammar’s article “The Enforcement or Return of Donors’ Designated Gifts.“
Frank Sommerville is a both a CPA and attorney, and a longtime Editorial Advisor for Church Law & Tax.

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

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